Identify the tax issue or issues suggested by the following situations and state each issue in the form of a question.
Williams Inc. is a U.S. corporation that manufacturer’s toys in a factory located near Milwaukee, Wisconsin. Williams sells the toys to its foreign subsidiary, which is incorporated in Carnema, a Caribbean country with no corporate income tax. Williams actually ships the toys to a warehouse in Carnema, where the toys are sealed in protective plastic wrappings and labeled. The foreign subsidiary resells the sealed and labeled toys in the European market. This year, the foreign subsidiary’s profit from toy sales will exceed $25 million.